I came across an interesting article on smartmoney.com about renting out rooms to roommates. However in this case, these homeowners do not own typical run of the mil houses, they own massive 16,000 square foot mansions.
Most of these homeowners decided upon themselves to rent out the rooms to make ends meet due to the sour economy. The article mentions one homeowner who had a real estate business go under was forced to rent out his five bedrooms in his mansion to keep his house, err mansion. To make matters worse, their property value has dropped by half, thus making it an unwisae decision to sell it.
What startles me is that one couple, who owns rental properties, was forced to reduce rent prices because the sour economy reduce their cash flow, thus reducing ther standard of living. So rather than cutting back on the finer things in life such as playing poker in Vegas or taking trips to Asia, they decided to rent out their spare rooms in the mansion to keep to their current standard of living.
Now, I’m a big advocate of saving especially to survive an economic down turn, but it just irks me that some people “need” to go to Lost Wages to play poker rather than cut back on the non essential activities in their lifes.
I know it’s their choice to do what they want to do with money and their being responsible by paying for it through other means, but doesn’t it make sense to at least step back and say “we really should save some money, just incase we have some unforeseen problems with cash flow from our rental properties.”
I praise the other mansion owners for opening up to the idea of renting out rooms especially in high faluent neighborhoods, where the concept can have a certain stigma.
Check out the article and let me know what you think.